Freedom to manage

NEIL MACGREGOR

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AS the Ministry of Culture, Government of India, reviews the practice of museum management, I have been asked to set out briefly the principles on which museums in the UK are organized. The British Museum, the first public cultural institution in Britain, was established by an Act of the UK Parliament in 1753. It established a Board of Trustees to hold the museum’s collection in perpetuity for public benefit.

The key purpose of the act was to set up an institution that would be funded, but not controlled, by government – a model of governance unique at the time, and which has provided the model for national museums and galleries and other public institutions in the UK. Inherent in this governance structure is the trustees’ freedom to operate independently from government, whilst remaining accountable to Parliament – the so-called ‘arm’s length principle’.

The extent and nature of these freedoms has changed over the last 250 years, but government reforms since the 1980s have given the British Museum (and other trustee museums in the UK) much greater autonomy. Of particular significance are the freedoms to manage our buildings, to raise funds and to determine the pay and conditions of staff. In my opinion, these freedoms are a major factor in the growth, achievements and considerable success of national museums and galleries in the UK over the last 30 years. They may be of interest and use to colleagues in India as they review their systems and structures.

 

The trustee model puts ownership and responsibility for the collection in the hands of trustees appointed through an open recruitment process involving public advertisement. They are not paid and are, in effect, volunteers making decisions independently of government, but they are accountable to Parliament.

The current constitution of the BM Board was established by the British Museum Act 1963 which reduced the size of the board to a more manageable 25 trustees from 51 and, importantly, gave the trustees freedom to elect their own chairman. The autonomy of the BM attracts the highest quality trustees to ensure appropriate stewardship of the collection, robust financial management, and the most productive and creative use of the museum’s special assets.

The board needs a wide range of skills and expertise, including a mix of scholars and lawyers, businessmen and benefactors. The process of finding suitable trustees is led by the BM, but with government ministers having the final choice from a list of recommended candidates. Government ministers and civil servants may not be trustees. The process is regulated by a Commissioner for Public Appointments who ensures openness, transparency and fairness in the decision making process. Trustees are appointed for two terms of four years typically. The current board includes two Nobel prize winners, and distinguished figures from India, Egypt, South Africa and other countries outside the UK.

The trustees choose the director, whose appointment is formally approved by the minister. The director is employed by the trustees and does not report to the minister. However, as the accounting officer for public funds, the director is answerable to Parliament’s Public Accounts Committee, the Auditor General and the National Audit Office. Together, the trustees and the director determine the museum’s policies and set its strategy.

Historically, this governance structure provided the trustees with considerable freedom to decide how the collection should be curated – they have always been responsible for how the objects should be cared for, and what acquisitions should be made, what sort and level of research carried out, objects displayed and which exhibitions to put on. This is an essential part of their role in ensuring that the museum serves all its publics. However, until the 1980s, the trustees did not own the buildings the collection was housed in and had very little say in their management. Pay was determined by government, and there was no incentive or capacity to raise significant funds to supplement government grant-in-aid.

 

During the 1980s, the government under Prime Minister Margaret Thatcher carried out a number of fundamental reforms of civil service departmental structures and the wider public sector, one of which was the privatization of the Property Service Agency (PSA), which had responsibility for most of the civic and royal buildings in the UK, including the BM’s estate. The PSA’s origins date back to the 14th century when its predecessor the Office of Works was set up to oversee the building of the royal castles and residences in England. By the 20th century, the PSA’s building portfolio was huge, but it was widely regarded as an unwieldy, inefficient and ineffective organization.

It was a source of much frustration on the part of the trustees and staff that they had no control over and little say in the management of the buildings. The PSA and its predecessors failed to recognize the complexities of the BM’s Bloomsbury building, and funding and design decisions were often inadequate or insensitive to the particular needs of the collection and the architecture.

Possibly the worst neglect was in the period after the Second World War when extensive bomb damage took several decades to repair and those repairs were often underfunded and of poor quality – perhaps not surprising given that the only source of funding at the time was from the central government.

 

In 1988, in a historic transformation, the PSA transferred responsibility for all of the BM buildings to the trustees. Trustees were now responsible for building maintenance and design, gallery refurbishments and new building works, without recourse to ministers or civil servants (except for very large capital projects where government approval was and still is required). This significant reform was widely welcomed by the BM and other national museums, but it was not without its challenges. The BM was faced with the management of 93,000 m2 of space at its Bloomsbury site and a further 20,000 m2 of off-site storage in London. This required the recruitment of professional and technical staff, including surveyors, architects, designers, craftsmen, facilities managers and project managers. The transfer of responsibility included a transfer of funding for building management, but this was not sufficient to meet all of the maintenance and future development costs.

However, perhaps the most important benefit of the transfer was the freedom of the BM to attract private support for gallery refurbishments and new developments. Before 1988, it was very difficult to raise private support for the renewal of buildings; donors were very unwilling to contribute to the PSA and have been much more willing to donate directly to the BM.

 

With over eight million objects, 77 galleries and over six million visitors a year, the BM’s costs are considerable. Since the mid-1980s, following a restructuring of government funding for public institutions, the museum has been free to keep any money it earns or raises in addition to its government grant-in-aid. This significant change has stimulated great activity in seeking sponsorship for buildings, activities and staff, and for endowment funds. The trustees are free to manage this money as they see fit, subject to public audit and parliamentary scrutiny.

The knowledge that the money will be looked after by trustees – and not by government – is a great incentive to donors. Trustees are free to offer the naming of rooms or spaces to sponsors to help renovate buildings. On this basis, companies, foundations, trusts and individuals have transformed UK museums in the last twenty-five years. Around half of the BM’s galleries and exhibition space have received financial sponsorship since 1988, worth over £65 million. In addition, other public spaces such as the Great Court, lecture theatres and education facilities have attracted £25 million in sponsorship.

The museum is – critically and significantly – free to trade commercially as it wishes. The British Museum runs its own publishing company and shops, which make a significant contribution to income. The shops sell a wide range of products, including reproductions and objects connected to the collection and special exhibitions, commissioned by the museum. The museum sells handbooks, catalogues and sound guides to the collection. In addition, it contracts out its restaurants to an outside provider for a commission. These commercial freedoms have enormously improved the experience of the visitor, and the shops and restaurants are an added reason for repeat visits. Together these activities now contribute over £2 million a year to the museum.

The museum is also free to make contracts with broadcasting or publishing companies, or to franchise the reproduction of its collection, either in print or online. For example, the BM’s partnership with the BBC on the 100-part radio series, A History of the World in 100 Objects, included a book of the series which has been published in ten countries so far, including China, Russia and Brazil, and which has brought significant income to the BM.

 

The trustees are free to lend objects from the collection within the UK and abroad. Whilst many loans from the BM are subject to charges to cover direct costs, the museum has developed a number of international touring exhibitions for which it charges a commercial fee and which generate significant income.

The director determines the programme of temporary exhibitions without the need to consult the ministry. The museum is free to decide what the entrance price for exhibitions should be and to seek financial sponsorship. These exhibitions attract considerable sponsorship, particularly corporate, and on balance make a net financial contribution through ticket sales and sales in the shops and restaurants.

Together these freedoms now contribute over half of the BM’s income, exceeding the amount granted by Parliament. This change comes entirely from the decision to allow museums to keep the money they earn and to determine how it is spent.

BM staff are not civil servants – they are employed by the trustees, not by government. In the 1990s, the government allowed the BM, along with other public bodies, to withdraw from centralized pay bargaining. This was in recognition of the need of bodies like museums to attract specialists and also to reduce the administrative cost in the treasury. The trustees are free to determine the structure and the pay levels of the staff, and this has greatly contributed to enabling the museum to respond more effectively to opportunities.

The director is free to make any staff appointments thought appropriate within the budget. The staff need not be British citizens – the museum can draw on a worldwide pool of expertise. The director is responsible for managing the staff and is free to dismiss for poor performance.

 

In my opinion, this cluster of freedoms, which has steadily increased over the last thirty years, has been a major factor in the energy and the achievements of UK national museums, widely recognized throughout the world. The ability to raise money from all kinds of activities; to manage and develop the buildings independently, to choose, manage, reward and dismiss staff; and to set different policies of public engagement depending on the different collections and their possible publics – all these have allowed the potential of the museums to be unlocked. They have attracted steadily growing support from the private sector, both commercial and individual. They have also been a major contributor to the large and continuing increase in visitor numbers – in 2013, the BM received a record-breaking 6.7 million visitors, and six UK museums including the BM were in the top twenty most visited museums in the world.

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